KARACHI: Oil sales increased 11% to a 10-year high at 26 million tons in the fiscal year ended June 30, 2017 driven by low prices, growing aggregate demand and increasing auto sales, a brokerage house reported on Wednesday.
White oil products including motor gasoline and diesel led the rally in oil sales as their sales were up 16% and 10%, respectively.
“Furnace oil sales improved 7% due to increased demand from power sector,” it said.
The total sales are, however, slightly lower than the brokerage house earlier estimated at 27 million tons, it recalled.
Motor gasoline (petrol) sales remained in line with estimates. However, diesel sales were better than anticipated “mainly due to increased demand from agriculture and transport sectors,” it said.
In June 2017 alone, OMC sales were down 4% year-on-year to 2.1 million tons as diesel and furnace oil sales declined by 7% and 13%, respectively.
Hascol Petroleum Limited’s (HASCOL) sales outperformed, growing by 45% whereas Pakistan State Oil continued to lose market share as its sales shed 8% year-on-year and 9% month-on-month despite offering discount to consumers on petrol.
Hascol has also remained the market leader in the fiscal year 2017, with growth of 44% driven by increasing outreach and expansion and dealer discounts, it said.
For FY18, the brokerage house anticipated oil sales to grow by 6% as furnace oil sale is expected to slow down amid installation of coal-based power plants.
Furnace oil is the commodity mostly utilised for power generation. The country is set to welcome addition of 2,900 megawatts from imported coal-fired power plants by December 2019. The generation from coal would replace expensive production from furnace oil.
“Motor gasoline will drive oil marketing companies’ sales due to economic growth and increasing auto sale,” the brokerage house added.
Published in The Express Tribune, July 6th, 2017.